Foreign exchange market. European session: the euro rose against the U.S. dollar despite the weaker-than-expected inflation data in the Eurozone

Economic calendar (GMT0):

01:00    Australia                Retail Sales Y/Y                                                                   April        +5.7%               +5.7%

01:00    China                    Non-Manufacturing PMI                                                      May          54.8                  55.5

01:30    Australia                Retail sales (MoM)                                                               April        +0.1%  +0.3%   +0.2%

01:30    Australia                Current Account, bln                                                         Quarter I  -10.1     -7.1        -5.7

01:30    Japan                    Labor Cash Earnings, YoY                                                  April        +0.7%  +0.6%   +0.9%

01:45    China                    HSBC Manufacturing PMI (Finally)                                        May         49.7      49.7       49.4

04:30    Australia                Announcement of the RBA decision on the discount rate                  2.50%   2.50%    2.50%

04:30    Australia                RBA Rate Statement                                                  

06:00    United Kingdom     Nationwide house price index                                              May         +1.2%  +0.7%   +0.7%

06:00    United Kingdom     Nationwide house price index, y/y                                       May       +10.9    +10.9% +11.1%

08:30    United Kingdom     PMI Construction                                                                May          60.8      61.2       60.0

09:00    Eurozone               Harmonized CPI, Y/Y (Preliminary)                                       May         +0.7%  +0.7%   +0.5%

09:00    Eurozone               Unemployment Rate                                                           April         11.8%   11.8%    11.7%

The U.S. dollar remained under pressure against the most major currencies ahead of the release of factory orders in the U.S. The U.S. factory orders should climb 0.6% in April, after a 1.1% gain in March.

The euro rose against the U.S. dollar despite the weaker-than-expected inflation data in the Eurozone. Eurozone’s inflation increased 0.5% in May, after a 0.7% gain in March. Analysts had expected a 0.7% rise. Inflation target by the European Central Bank (ECB) is 2%.

The unemployment rate in the Eurozone fell to 11.7% in April from 11.8% in March. Analysts had expected the unemployment rate remains unchanged.

The number of unemployed people in Spain decreased by 111,900 in May, after a 111,600 decline in April. Analysts had forecasted a 112,300 drop.

Market participants expect the European Central Bank will add further stimulus measures on Thursday. Investors are awaiting the ECB will cut interest rates and announce measures to boost lending to smaller businesses.

The British pound traded mixed against the U.S. dollar. The U.K. construction purchasing managers' index declined to 60.0 in May, from 60.8 in April. Analysts had expected the index to increase to 61.2.

Nationwide house price index for the U.K. climbed 0.7% in May, meeting analysts’ expectations, after a 1.2% rise in April. On a yearly basis, Nationwide house price index for the U.K. rose 11.1% in May, after a 10.9% increase in April. Analysts had expected the index remains unchanged.

EUR/USD: the currency pair declined to $1.3644

GBP/USD: the currency pair traded mixed

USD/JPY: the currency pair traded mixed

The most important news that are expected (GMT0):

14:00    U.S.     Factory Orders April      +1.1%  +0.6%